SEC Whistleblower Program 2019 Annual Report Tells Story of Significant Impact - Despite Beginning the Year with a Government Shutdown

In its 2019 Annual Report to Congress, the SEC Office of the Whistleblower described its program as continuing to have a “significant impact” on enforcement and investor protection efforts.  In the fiscal year that ended in September 2019, the SEC Whistleblower Program received the second highest number of tips in program history, and issued the third largest whistleblower award to date. These numbers illustrate the benefits of the SEC Whistleblower Program, which...

Legislation Watch: Proposed Amendments to Bank Secrecy Act Include Whistleblower Rewards

Currently in the 116th Congress, both the House and Senate are considering bills that would amend existing law to provide a whistleblower reporting system and meaningful financial rewards to whistleblowers who come forward to the federal government to report unlawful money laundering and other violations of specified banking laws. We have previously written on the important benefits that would be available with meaningful anti-money laundering (“AML”) whistleblower rewards. These bills,...

Catch of the Week — Yukom Communications and Others Face CFTC Claims of Binary Options Fraud

The Commodity Futures Trading Commission filed suit against five entities and four individuals on August 12, 2019, in the Northern District of Illinois for running a $103 million fraudulent binary options scheme. The defendants, led by Israeli company Yukom Communications Ltd.,which marketed binary options using two websites known as BinaryBook and BigOption. In recent years, the CFTC has targeted fraudulent binary options schemes offered by unregistered entities and individuals.  Binary...

Constantine Cannon Whistleblower Client Wins First-Ever False Claims Act Settlement for Cybersecurity Fraud

Cisco Systems, a Fortune 100 Company, was alleged to be selling security surveillance technology to federal, state, and local agencies while fully conscious of its serious vulnerabilities. WASHINGTON, D.C., July 31, 2019 – In the first cybersecurity whistleblower case ever successfully litigated under the False Claims Act, Cisco Systems, Inc. has agreed to an $8.6 million settlement to resolve allegations it knowingly sold vulnerable video surveillance software to federal, state...

How Businesses Can Use Whistleblower Reward Laws to Stop Unfair Competition

Most anyone can be a whistleblower. The role is not limited to the corporate insider or company employee at the meeting, on the conference call or in receipt of the email or text message where the “smoking-gun” evidence of fraud or misconduct is disclosed. Whistleblowers can be any person, or an entity, with non-public information about fraudulent conduct giving rise to a whistleblower claim.  Often, businesses have such information about...

How to Be a Whistleblower

You know about fraud, waste, abuse, or corruption by an individual or a company. Someone is getting by with cheating -- taking money from the government, taxpayers, or investors, or even harming others, such as patients. You are deeply troubled about it and want the proper authorities to stop it. You are worried whether you will be heard, taken seriously, and protected. You wonder if your information fits within a...

SEC Gives First Ever Whistleblower Award Under Rule That Incentivizes Internal Reporting

On May 24, the Securities & Exchange Commission announced that it awarded over $4.5 million to a whistleblower who both reported allegations of securities fraud at a company internally and shared this information with the SEC. This is the first time since the creation of its whistleblower rewards program that the SEC awards a claimant under Rule 21-F4(c)(3) of the Exchange Act, a provision designed to encourage whistleblowers to use internal compliance...

Ted Siedle is the rare SEC whistleblower who allows us to put a face to the name.

After two years of waiting, the recipient of what was the largest whistleblower award to date under the SEC Whistleblower Program when it was first announced in 2017, was finally paid by the SEC. This week, he received his share of a $50 million reward to two whistleblowers for exposing conflicts of interest at JP Morgan that led to a $267 million fine by the SEC. Last year, the whistleblower...

DOJ to Corporate America — Embrace the Whistleblower

In a clear push to companies to tighten up their internal compliance efforts, the DOJ Criminal Division recently announced a remake of the agency's guidelines for corporate compliance programs. The document, titled "The Evaluation of Corporate Compliance Programs," updates a previous version of the guidelines and is designed to provide more insight and context into the steps DOJ expects companies to take to ensure they stay on the right side...

Constantine Cannon Attorneys Eric Havian and Michael Ronickher Published on Need for Whistleblowers in Anti-Money Laundering Enforcement

With a whistleblower program for anti-money laundering enforcement currently under discussion in the House of Representatives Financial Services subcommittee, Constantine Cannon attorneys Eric Havian and Michael Ronickher were published in Banking Exchange on April 22 on the benefits such a program could bring. Highlighting the example of the recent Standard Chartered settlement, in which the London-based bank agreed to pay over $1 billion to settle allegations it helped clients conceal...